South Africa is the second largest economy in Africa, with a Gross Domestic Product of more than $340 billion and a population of more than 56 million. The biggest economy in the continent is Nigeria, which has a population of more than 190 million people and a GDP of more than $375 billion.

Last year, when the Jacob Zuma administration was kicked out of government, the hopes among investors was that the country’s economy would start to grow. They put their hopes on the Cyril Ramaphosa, who became the new head of state. They loved him because he has never been accused of being corrupt. They also loved his corporate background.

However, things have not been good in the country. In the third quarter of last year, the economy grew by 1.4%. In the fourth quarter, it grew by 1.1%. This was below the global average of more than 3%. Yesterday, data from the country showed that the mining sector had eased in March. Gold production declined by 20.6%. This was a lesser decline than the February’s and January’s decline of more than 22% and 31% respectively. The production has been declining for years. In the mining sector, the declines came at 7.5%, which was higher than the 3.2% that traders were expecting. The sector too has been in decline for years.

The decline in the mining sector has led to major implications for South Africa, which is a leading country in the production of precious metals like gold and palladium. The production has declined as the reserves shrink and as the cost of production has gone up. As such, companies have been forced to slash their staff. This year, Sibanye Stillwater announced that it was cutting more than 6000 employees. More than 90K miners are expecting to be fired as the cost of energy continue to increase. As a result, the unemployment rate has continued to increase and currently stands at more than 27%.

This month, the USD/ZAR pair declined sharply after the Fed continued to sound dovish. The central bank has left the interest rates unchanged at the 6.75% level. As such, the pair has declined from a high of 14.75 to a low of 13.90. On the chart below, this price is slightly along the 21-day and 42-day moving averages while the RSI has started moving up. There is a likelihood that the pair may move to test the 50% Fibonacci Retracement level of 14.30.